Has your life insurance policy lapsed? Here is how to revive it

Life insurance is a must for any working professional. It gives your family the much-needed financial protection and allows you to save more on income tax. But, what if your life insurance policy lapses? It would expose you and your dependents to risk. Since you are not entitled to any cover benefit after the policy lapse, it beats the purpose of availing life insurance.  

When does an insurance policy expires? 

If you fail to pay premium within the due date, you still have time to do so without payment of interest on the premium. This period is called the grace period (With the exception of some plans). The grace period for policies where the premium payment mode is monthly is 15 days from the due date. The grace period for policies where the premium payment mode is quarterly, half-yearly or yearly is one month but not less than 30 days. 

A life insurance policy lapses when you fail to pay the premium within the grace period and with this lapse, the benefits attached with the policy also lapse.  

How to revive lapsed policies? 

If your policy has lapsed due to non-payment of premiums within the due date, the terms and conditions of the policy contract are rendered void, till you revive your policy. It can be revived by paying the accumulated premiums with interest as well as giving the health requirements as required.  

To revive a lapsed policy, the policyholder has to bear a renewal fee along with late fee and additional interests, penalties on the last two years' due premiums. The insurance company may even ask for a medical examination again in case of the term insurance policy. However, some insurers may waive these conditions in case of a revival campaign.